Eric King:  “Art, is there an alliance forming between Germany, Russia, and China?”

Cashin:  “I don’t think a full, specific alliance.  But I think what you are seeing is Russia demonstrating to the West that they can find customers elsewhere, and they are utilizing China.  The most interesting conversation in that area is that all of the BRIC nations are looking to find an alternative for the U.S. dollar as a reserve currency.  That could be a black swan that not many people are thinking about.

And the Germans would not be disappointed in that either.  So I think you want to keep an eye on what’s going on here and see if under the cover of some of these geopolitical strains we find that there is going to be a currency problem building that could be global.”

Eric King:  “Art, I pointed out the last time we spoke that it had been relatively quiet in Europe for some time.  But you were warning that there were going to be problems.  Sure enough we have seen the eruption in the European banking system.  How bad will that crisis become?”

Cashin:  “It bears watching.  You saw it pop up in Portugal with the Banco Espirito Santo out of the blue mentioning that they perhaps could not meet their obligations.  They (European central planners) have cobbled together, it looks to be, an answer for them.  But the suspicion here on Wall Street is that there are many more (banks that may begin imploding).

So the banking crisis in Europe which had a great deal to do with sovereign debt still exists over there.  Their positioning has some of their rates even lower than the yields on our bonds.  And I cannot find any person who is not in an institution who thinks that there is any kind of logic to that.  So danger lurks out there.  Timing is always a difficult thing to talk about, but keep a steady eye on the financial system in Europe.”

Eric King:  “You were one of the youngest traders to ever earn a seat on the exchange and you’ve been doing this for over half a century.  What are your big worries going forward?  I know we’ve covered geopolitics but what has you concerned?”

Cashin:  “That still remains at the top.  I think the ISIS group in Iraq can present a very clear, present, and almost instantaneous danger.  Second, the connectivity and possible contagion of the financial systems.  Europe in particular looks a little strange to me.  They don’t have the same kind of central government bond system that we have.  Certain benefits and protections that the Fed might still be able to find here will be denied there.  And the mystery that is the Chinese banking system -- that would be my third worry.

So from a financial standpoint, Europe and China.  And in geopolitics, primarily what’s going on with ISIS.  The suicide bombers that are in Baghdad today may not stay in that part of the world.  These people are very expansionary as far as terror is concerned.

ISIS has already threatened to infiltrate Saudi Arabia with some insurgents.  That could bring real concerns.  Even if they didn’t make great headway they would still be disruptive to the oil market.  I’m worried about these guys taking over whole chunks of the Middle East and possibly trying to depose the Saudi Royal Family.  There are some greater dangers than just pipelines (being blown up).  So we are living in a very sensitive and tender world and you must stay wary, alert, and very, very nimble at all times.” Art Cashin also covers what to expect in the gold market as well as other markets across the globe, the European banking crisis, geopolitical instability around the world and what surprises to expect in the future in one of his most important interviews ever.  The King World News audio interview with Art Cashin is available now and you can listen to it by CLICKING HERE.

IMPORTANT - KWN will be releasing the second interview with Andrew Maguire within hours.

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The audio interviews with Andrew Maguire, Art Cashin, Michael Pento, Gerald Celente, MEP Nigel Farage, Eric Sprott, Bill Fleckenstein, David Stockman, William Kaye, Dr. Paul Craig Roberts, John Hathaway and Marc Faber are available now. Other recent KWN interviews include Jim Grant and Felix Zulauf -- to listen CLICK HERE.

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